The Moonwell lending protocol, built on the Base Ethereum <button class="define-target" id="layer-2">L2</button>, wound up with $3.7&nbsp;million in <button class="define-target" id="bad-debt">bad debt</button> after an attacker took advantage of an <button class="define-target" id="oracle">oracle</button> malfunction that caused the price of wrsETH to be massively inflated. The Chainlink oracle used by the project erroneously reported that a single wrsETH token (Kelp DAO's <button class="define-target" id="wrapped-token">wrapped</button> <button class="define-target" id="restaking">restaked</button> ETH) was priced at around 1.65&nbsp;million ETH (~$5.8&nbsp;billion). Within 30&nbsp;seconds of the oracle reporting bad data, an attacker took advantage of the error to borrow huge amounts of tokens, which they then swapped to other tokens to cash out.<p>Ultimately the attacker profited around 295&nbsp;ETH (~$1&nbsp;million), but the protocol was saddled with significantly more bad debt that the team will now have to grapple with.</p>

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